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George Westinghouse and the Business of Innovation During the Age of Edison

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George Westinghouse and the Business of Innovation During the Age of Edison Steven W. Usselman From Novelty to Utility: George Westinghouse and the Business of Innovation during the Age of Edison This article argues that Thomas Edison and George West- inghouse, despite some shared characteristics in their approach to technical problems and a common interest in electric power, pursued distinct markets for innovation. Edison sold novelties to upper-class urbanites, whereas Westinghouse provided equipment to railroads and other industrial customers. As a consequence, the two entrepre- neurs consistently exhibited different attitudes toward the process of innovation and different inclinations as business- men. Westinghouse, more than Edison, foreshadowed the coming of corporate research and development. ince the late 1970s, few areas of inquiry in business history Shave proved as fruitful as the study of corporate research and development. Moving beyond an older, simpler image of R&D as science applied by industry to produce novelty, historians now interpret R&D programs as components of corporate strategies designed to address specific business conditions.1 Corporations typically created laboratories in hopes of attaining order and con- trol over established lines of business.2 In joining programs of technological development to their production and marketing STEVEN W. USSELMAN is associate professor of history at the University of North Carolina at Charlotte. I wish to thank David Hounshell for his sustaining interest in this project and for his help in obtaining illustrations and Glenn Porter for his wise counsel after reading an earlier draft of this essay. 1 For a recent review of this literature, see John Kenly Smith, Jr., "The Scientific Tradition in American Industrial Research," Technology and Culture 31 (1990): 121-31. 2 For an excellent discussion of the motivations behind the founding of two impor- tant early laboratories, see Leonard S. Reich, The Making of American Industrial Research: Science and Business at GE and Bell, 1876-1926 (New York, 1985). Business History Review 66 (Summer 1992): 251-304. © 1992 by The President and Fellows of Harvard College. Steven W. Usselman I 252 organizations, these firms gave life to institutions that inexorably altered the ways in which new technology was generated and dif- fused. A new breed of managers, the corporate research directors, emerged as important figures in the realm of science and technol- ogy.3 Their prominence signaled clearly that bureaucracy and organization had come to exert powerful influences on the course of technological innovation. Studies of R&D have revealed many important and suggestive insights into the connections between economic institutions and technical change, but they have concentrated on the twentieth century, when corporate research programs acquired a distinct identity at several prominent firms.4 Historians have made far less headway in addressing similar issues during earlier stages of the corporate revolution. Our understanding of the process of techno- logical innovation during the last quarter of the nineteenth century remains highly fragmented. Case studies tell us how particular firms innovated technologically, but we lack synthetic interpreta- tions that draw comparisons and consider relations among firms.5 Perhaps the single greatest exception to this generalization is the work of Thomas P. Hughes. Throughout his distinguished career, Hughes has sought to bring a more structured analysis to the elusive subject of invention and innovation. In American Genesis, he summarized his thinking about inventors of the late nineteenth century and made them the foundation stone of what he called "a century of technological enthusiasm" that began in the United States in 1876. By placing his analysis of inventors such as Thomas Edison and Elmer Sperry in a larger chronological context that includes corporate research, Hughes invites comparison between the processes of technological change in the different 3 Ibid. For an insightful discussion of one prominent research director, Charles M. A. Stine, see David A. Hounshell and John Kenly Smith, Jr., Science and Corporate Strategy: Du Pont R&D, 1902-1980 (New York, 1988), 125-37. 4 Many of the recent treatments of corporate R&D begin with overviews of techni- cal activities at the firms prior to 1900, but these introductory sections seldom examine the connections between technical expertise and business strategy and organization with anything close to the detail and insight they achieve for the period after 1900. For a partial exception, see Reich, The Making of American Industrial Research, chaps. 2, 3, and 6. On research during the nineteenth century at Bell, also see Lillian Hodde- son, "The Emergence of Basic Research in the Bell Telephone System, 1875-1915," Technology and Culture 22 (1981): 512-44. 5 For an important exception that connects research to corporate structure across an entire industry during the nineteenth century, see Reese Jenkins, Images and Enter- prise: Technology and the American Photographic Industry, 1839-1925 (Baltimore, Md., 1975). George Westinghouse and the Business of Innovation I 253 institutional settings of late nineteenth and early twentieth century America. He writes of "independent inventors" who produced "radical" inventions in the nineteenth century, of "industrial sci- entists" who "were often constrained" and produced "conserva- tive" ones in the twentieth. The rise of technological systems drew a line between the independents and the industrial scientists. Independents invented systems; industrial scientists were left to work within them. "System-originating" inventions gave way to "system-improving" ones.6 In this conceptualization, Hughes naturally reserves an espe- cially prominent place for Thomas Edison, who provides the archetype for the independent, system-originating inventor. Hughes devotes virtually none of his account to George Westing- house, Edison's famous contemporary and notorious adversary in the field of electric light and power. This comparative neglect of Westinghouse is very much in keeping with the balance of atten- tion paid the two men by other historians in recent times. The collection and cataloging of the vast Edison archives has unleashed a flurry of outstanding new studies by specialists. At the same time, generalists seeking to incorporate invention and technology into the American experience have naturally turned first to the familiar figure of the Wizard of Menlo Park. This concentration on Edison at the expense of Westinghouse marks an intriguing depar- ture, however, from the view that prevailed during their own life- times and for many decades afterward. Even before the notorious "battle of the currents" linked their names in the public conscious- ness a century ago, Edison and Westinghouse often appeared as a matched set. And as recently as a generation ago, Harold Passer gave them twin billing in his outstanding study of invention and entrepreneurship. In Passer's assessment, Edison and Westing- house represented two peas in a pod, the two "pioneer innovators" of the electrical industry. "The similarity between the two," he concluded, "is striking."7 6 Thomas P. Hughes, American Genesis: A Century of Invention and Technological Enthusiasm (New York, 1989). For a comprehensive, integrated presentation of his ideas, see Thomas P. Hughes, Networks of Power: Electrification in Western Society, 1880-1930 (Baltimore, Md., 1983). On his thinking about invention, see also Thomas Parke Hughes, Elmer Sperry: Inventor and Engineer (Baltimore, Md., 1971) and Tho- mas P. Hughes, Thomas Edison: Professional Inventor (London, 1976). 7 Harold C. Passer, The Electrical Manufacturers, 1875-1900: A Study in Competi- tion, Technical Change, and Economic Growth (Cambridge, Mass., 1953), esp. chap. 11, quotation from 192. Steven W. Usselman I 254 This article attempts to bring Westinghouse back into the pic- ture and to assess his career in light of the transformation that Hughes has demarcated. Utilizing materials found in the archives of several railroads, it seeks to re-evaluate Westinghouse, and it draws on recent scholarship to offer fresh comparisons between him and Edison. This perspective suggests that the two men shared important traits as inventors but differed markedly in their approach to the business aspects of innovation. From his early years as a contract inventor for the telegraph industry through the obsessive pursuit of better sound reproduction that occupied him into old age, Edison devoted his talents to providing novelties for the urban upper class. His enterprises always made novelty their top priority, often at the expense of development and manufactur- ing. Frequently they gave way to more focused competitors. Westinghouse, by contrast, began his professional life marketing innovative products to the railroads, a small group of highly orga- nized institutions that placed a premium on system and order. He responded with a variety of business tactics, including clever use of patent rights and a keen appreciation for technical compromise and standardization, that enabled him to secure tight control over several products. Later, his endeavors in electric power and other fields exhibited similar characteristics. As a consequence, West- inghouse better exemplified the features of systematic, ordered technological development that would become hallmarks of corpo- rate R&D. More than Edison, he foreshadowed the future. Edison: Inventive Showman Contrary to what his involvement with electric power
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